You may be experiencing financial hardship and wondering whether you should file a Chapter 13 bankruptcy in Oregon. Bankruptcy is a legal debt relief option to help provide relief from debt. The purpose of this article is to provide as much information about Chapter 13 and Chapter 7 bankruptcy in Oregon.
As you read this article, you will learn about the essential things to consider before filing for a bankruptcy discharge in Oregon. We can also help you find a bankruptcy lawyer within your vicinity who can help to shed more light on the bankruptcy process. If you decide to speak with a local attorney they can dive into the costs to filing bankruptcy or you can this other article. Continue reading for more information.
Chapter 7 vs. Chapter 13 Bankruptcy in Oregon
Making a choice between filing for a Chapter 7 bankruptcy discharge and Chapter 13 bankruptcy discharge can be a pretty complicated decision. You need to find out if any of them will result in loss of asset, and consider the Means Test to know if you’ll qualify. After doing that, you should consider other factors to know if you should file for Chapter 7 or 13 bankruptcy.
Filing Chapter 13 Bankruptcy in Oregon
In Chapter 13 bankruptcy, the court restructures your debt to make it easier for you to pay. The court will also forgive debts it thinks will prove difficult for you to pay within the given time-frame. Here are some types of debts that make up a Chapter 13 payment plan:
- Past due mortgage payments (mortgage arrearage); it can prevent the creditor from foreclosing on your home.
- Car loan payments: it can help reduce what you pay on a car loan by stretching out the payment period.
- Attorney fees
- Alimony, child support. Old tax debts must be paid fully.
- Unsecured debts; even though it’s rare to see chapter 13 plans to pay this debt in full, unsecured creditors are often compensated with some percentage of the amount. When the debtor completes the Chapter 13 case, the remaining balances are then discharged.
In an instance where the debtor has properties that are termed “non-exempt equity,” the Chapter 13 payment plan will increase. You should also include disposable income from the Means Test in the Chapter 13 plan payment.
The Chapter 13 bankruptcy case can help you prevent repossessions, avoid foreclosures, reduce what you owe unsecured creditors and help to protect your property. For extra information about filing for Chapter 13 bankruptcy as a resident of Oregon, then you’ll find our Chapter 13 Guide very helpful. If you like to know what your payment plan will look like, then you should use of free Chapter 13 calculator below.
Oregon Chapter 7 Bankruptcy Means Test
The Means Test seems to be important, but how does it impact my bankruptcy case? States have an income requirement for filing for a Chapter 7 bankruptcy discharge, and it’s the Means Test that helps sort those that qualify from others. Means Testing in Oregon involves a calculation of the debtor’s current monthly income and annual median income to determine if he/she meets the requirement.
The Means Test also calculates the disposable income of a person, which is the ultimate factor in determining who qualifies for Chapter 13 bankruptcy.
The means test may also be used to determine if you’ll qualify for a Chapter 7 bankruptcy discharge. But this only happens if your median income is higher than the benchmark set for it.
Calculating Current Monthly Income for the Oregon Means Test
Current monthly income is calculated by averaging the income of your household for six months prior to filing for bankruptcy relief. However, income from Social Security Administration (Social Security Disability income and (Social Security Retirement) won’t be added in the process. Divide the total income by six, and that is your current monthly income that’ll be used for the Means Test. If you’re finding this tricky, then you should use our calculator below to estimate your income. The Average income calculator is very useful in helping you estimate your income for the Chapter 7 bankruptcy qualification calculator.
Income that can be added for CMI includes, but not limited to, the following:
- Bonuses, salaries, commissions, overtime pay, and wages
- All income from rental properties and other businesses
- Alimony and child support payments
- Royalties, interests, and dividends
- Unemployment benefits and workers’ compensation
- Private disability insurance benefits
- Money contributed by a roommate, domestic partner, family member, non-filing spouse, etc.
- Annuity, retirement, and pension income
Although this is not an exhaustive list, you can check with the bankruptcy court in Oregon to have the full list.
You can now plug the figures into the Chapter 7 Means Test Calculator for Oregon that’s below to know if you qualify for a discharge or not. You can also use the table of information below to calculate your annual median income.
Calculating Annual Median Income for Oregon Means Testing
The annual median income is derived by multiplying your income within the last six months by 12. Thus, at a CMI of $4,000, the annual median income will be $48,000.
Your median income is an essential determinant of whether you’ll get a bankruptcy discharge or not. And this works by comparing your median income with the average median income of the same household size. If your median income is higher than the average median income, then you may not qualify for a Chapter 7 bankruptcy discharge. However, you still have to complete the other part of the Means Test to know for sure.
Also, the proposed plan attached to the Chapter 13 bankruptcy petition must be calculated based on a five-year plan.
The average median income is adjusted regularly, so you need to take the current figures into account when completing the Means Test. Here are the median income figures for Oregon as of this moment:
Calculating Disposable Income
There are two reasons why disposable income is important:
- You can qualify for a bankruptcy discharge in a Chapter 7 bankruptcy case if your disposable income is below a pre-determined amount. This is so even if your median income is below the Oregon median income. Your disposable income will be included in your Chapter 13 plan payment. As such, it’ll be beneficial to you if your disposable income is as low as possible.
- Your disposable income is your CMI less compulsory payroll deductions and the allowable estimated living expenses. In some instances, the acceptable living expenses are calculated based on your national standards and the dependent in the home. You will be asked to justify your expense and submit proof of payment if the amount you claim is above national standards.
National standards are applied to some items like transportation, personal care items, food, healthcare expenses, household items, clothing, and the cost of transportation.
Other expenses that are allowed include, but are not limited to, the following:
- Mortgage or rent payments
- Childcare costs
- Alimony and child support
- Some charitable contributions
- Life and disability insurance premiums
- Car loan payments
- Payroll tax reductions and other necessary deductions for union dues, retirement, and uniforms.
You’re not permitted to include expenses for non-essentials and luxury when calculating your disposable income. To make the process much easier, then you should try Ascend’s Chapter 7 Means Test Calculator.
Oregon Bankruptcy Exemptions
Apart from the Means Test, you should also consider the bankruptcy exemption that can help protect your asset. Bankruptcy exemptions are legal coverings that are designed to protect some of your assets from being liquidated by the bankruptcy trustee. In a typical Chapter 13 bankruptcy case, the non-exempt equity will increase the monthly payments of the debtor.
Federal Bankruptcy Exemption vs. Oregon Bankruptcy Exemptions
Oregon has its own far-reaching bankruptcy exemptions. The exemptions are accessible to individuals that have resided in Oregon for a minimum of 730 days prior to filing for bankruptcy relief. However, debtors still retain the power to file for federal bankruptcy exemptions in 11 USC §562.
You can find the majority of bankruptcy exemptions for Oregon in Oregon Revised Statures procedure in Civil Proceedings §18.345. You will find the Oregon homestead exemption in §18.395 and §18.402. The amounts and exemptions are regularly changed, so you should research for current changes to the code by surfing the internet or making inquiries from a bankruptcy lawyer.
Sometimes, the Oregon Bankruptcy exemption may protect more equity in certain assets in comparison to federal bankruptcy exemptions. But this doesn’t always happen. As such, it’s imperative that a debtor compares the federal bankruptcy exemption and the federal bankruptcy exemption to know which suits him/her best. If you hire a bankruptcy lawyer, the lawyer will perform this function for you.
Some assets that bankruptcy exemptions can cover include but not limited to, the following:
- Motor vehicles
- Retirement and pension accounts
- Business equipment
- Guns and firearms
- A person’s home
- Jewelry, clothing, and personal property
- Guns and firearms
- Government benefit and public aid
- Child support and spousal support
- Furnishings and household goods
- Life insurances and some other assets
Oregon Debtor Education and Credit Counseling Courses
If you like to file for bankruptcy relief, then you’ll be mandated to take two bankruptcy courses before you’re issued a bankruptcy discharge. The first course is the Credit Counseling Course. It educates the debtor on the meaning of bankruptcy and tells them about other debt options. You will also be asked to make a budget to ascertain that bankruptcy is the best option for you. You must complete the course before 180 days of filing for a bankruptcy discharge.
The next course is the Debtor Education Course that aims to enlighten you on how to manage your money after filing for a bankruptcy discharge. You must complete the course after you officially filed for a bankruptcy discharge. If not, you won’t get a certificate of bankruptcy discharge if you refuse to complete the Debtor Education Course and send the court a copy of your certificate of completion.
You can complete the two courses online, and it’ll only cost you a token. However, you must ensure that the company that you’ll use is approved by the United States Trustee’s Office. You can access a list of approved credit counseling and debtor education providers by visiting the UST’s website.
Bankruptcy Courts and Trustees for Oregon
There is only one bankruptcy district in Oregon. You can locate the bankruptcy court for the District of Oregon at 1050 SW 6th Avenue in Portland. Another location exists at 405 East 8th Avenue in Eugene, but it’s currently closed due to Covid-19. You can contact the Portland office by putting a call through by dialing (503) 326-1500 to know when they’ll open the court and Eugene.
There is helpful information for debtors at the Oregon bankruptcy court. You will also find information on local bankruptcy forms and the local rules from the bankruptcy court. There are several bankruptcy trustees in the bankruptcy court of Oregon, and the bankruptcy court will apply any one of them to you. Both Chapter 7 trustees and Chapter 13 trustees are private individuals that are under the supervision of the United States Trustee.
For now, there are just two Chapter 13 trustees and six Chapter 7 trustees handling cases in Oregon.
Chapter 13 Bankruptcy Trustees Oregon
|Wayne R. Godare||(503) 972-6300|
|Naliko K. Markel||(541) 343-1556|
Should I file for a Chapter 13 bankruptcy discharge in Oregon?
Whether to file Chapter 13 bankruptcy is your decision. Before you file, you may want to determine what your Chapter 13 payment would be using the calculator below and compare Chapter 7 to Chapter 13 bankruptcy in Oregon. You should also consider your alternative to ascertain that you’re opting for the best option.